On 15 Februrary 2016, Samriddhi Foundation with Department of Industry (DOI) hosted a discussion session on ‘England’s transition from agrarian to industrial economy’ at Hotel Annapurna, Durbarmarg. The session’s featured speaker was Dr. Eamonn Butler, Director of the Adam Smith Institute and was moderated by Dr. Hemant Dabadi, Senior Fellow at Samriddhi Foundation.
Dr. Eamonn Butler is Founder and Director of the Adam Smith Institute (ASI). ASI has been influential in several public sector & tax reforms in the UK and was ranked 7th in global think tank rankings in 2013, making Dr. Butler an excellent resource person to talk about how private sector can play a constructive role in economic policy reform.
During the program, Mr. Bipin Rajbhandari from the DOI presented on ‘Investment policies in Nepal’. He gave a brief presentation on the acts and laws governing foreign direct investment in Nepal. He also presented a summary of current situation of investment and highlights of the Industrial Policy– 2010 and Foreign Investment Policy- 2015. He described the provisions of these acts and policies and the areas/sectors that are prioritized.
The session moved forward with Dr. Eamonn Butler’s presentation which was focused on England’s transition from agrarian to industrial economy. He shared that from 1750- 1850 wages rose significantly, average life expectancy rose by 5 years, infant mortality reduced by more than half and the size of population doubled. However, these positive changes were not driven by the government but by the ingenuity of entrepreneurs and the innovations that came about from them. The most important role that the government played was maintaining the rule of law and protecting the property rights of individuals and facilitating the economy by reducing barriers and controls. Hence, the growth was self-perpetuating. Investments led to production which led to surpluses which in turn led to trade, generating revenues which were again invested and the process continued.
During the discussion, many relevant lessons for Nepal emerged. For e.g. the idea that growth comes from small businesses and that regulations have a big impact on their growth. Similarly, innovation is possible when entrepreneurs are left free, they are assured of timely contract enforcement, and are not brought down by large compliance requirements and transaction costs.